Baird: Sept. Shipments Flat, Q3 Sees Declines

Robert W. Baird & Co. issued a client newsletter to investors following the towable sales report for August by Statistical Surveys Inc. The following offers a summary of the results.

Wholesale RV shipments were mixed in September. Total RV shipments were relatively flat on weak motorhome results (-21%) and modest growth in towables (+4%). Facing an uncertain economy and weaker consumer confidence, consumers seem less likely to buy and dealers are less likely to stock – leading to slower RV orders in the back half of 2011.

Total September RV shipments flat: Overall trends have deteriorated significantly, with wholesale down 4% in calendar Q3 following 8% growth seen in the first half of 2011. Following seasonal restocking in the first half, retail failed to recover and dealers have slowed orders. Recall that dealers reduced inventory during the last cycle, limiting destocking pressure if retail lags.

Motorhome shipments down 21%: Class A shipments fell 17% in September, while Class C shipments dropped 29%. For perspective, we model Winnebago shipments down 3% in the November quarter – but it is early and percentage swings are more volatile during the off season.

SAAR: We calculate a seasonally adjusted annual rate of shipments. The SAAR of motorhome shipments decreased to 17.2K units in September, from 20.4K units in August (23.6K units were shipped in 2010). The SAAR of towable shipments fell to 177K units in September, from 205K units in August (199K units were shipped in 2010).

This summary of a Baird research report is not intended as investment advice. To participate in Baird surveys and receive research reports, contact Craig R. Kennison, CFA, at ckennison@rwbaird.com.